Fixed deposits remain one of the most trusted investment options for Indians. Safe, predictable, and guaranteed — FDs offer peace of mind that equity markets cannot. But with dozens of banks offering different rates, choosing the right FD can mean a difference of ₹10,000 to ₹50,000 in interest over a 3–5 year period.
In this guide, we compare FD interest rates across major Indian banks, small finance banks, and post office schemes for 2025 — so you can make the most of your savings.
FD Rates — Major Public Sector Banks (2025)
| Bank | 1 Year | 2 Years | 3 Years | 5 Years | Senior Citizen |
|---|
| SBI | 6.80% | 7.00% | 6.75% | 6.50% | +0.50% |
| Bank of Baroda | 6.85% | 7.00% | 6.50% | 6.50% | +0.50% |
| Punjab National Bank | 6.80% | 6.80% | 6.50% | 6.50% | +0.50% |
| Canara Bank | 6.85% | 6.85% | 6.70% | 6.70% | +0.50% |
| Union Bank | 6.80% | 6.80% | 6.50% | 6.50% | +0.50% |
Note: Public sector banks offer lower rates but are backed by the Government of India — making them the safest option for risk-averse investors.
FD Rates — Major Private Banks (2025)
| Bank | 1 Year | 2 Years | 3 Years | 5 Years | Senior Citizen |
|---|
| HDFC Bank | 6.60% | 7.00% | 7.00% | 7.00% | +0.50% |
| ICICI Bank | 6.70% | 7.00% | 7.00% | 7.00% | +0.50% |
| Axis Bank | 6.70% | 7.10% | 7.10% | 7.00% | +0.75% |
| Kotak Mahindra | 7.10% | 7.10% | 7.00% | 6.20% | +0.50% |
| IndusInd Bank | 7.75% | 7.25% | 7.25% | 7.25% | +0.50% |
Private banks generally offer slightly higher rates than public sector banks. HDFC, ICICI, and Axis are safe choices backed by strong balance sheets and RBI regulation.
FD Rates — Small Finance Banks (Highest Rates)
| Bank | 1 Year | 2 Years | 3 Years | Senior Citizen |
|---|
| Unity Small Finance Bank | 8.50% | 8.50% | 8.25% | +0.50% |
| Suryoday Small Finance Bank | 8.60% | 8.25% | 8.25% | +0.75% |
| ESAF Small Finance Bank | 8.25% | 8.25% | 8.00% | +0.50% |
| Utkarsh Small Finance Bank | 8.50% | 8.25% | 8.00% | +0.75% |
| Jana Small Finance Bank | 8.25% | 8.00% | 8.00% | +0.50% |
Small finance banks offer the highest FD rates in India — often 1.5 to 2% higher than large banks. However they carry slightly higher risk. Key protection: deposits up to ₹5 lakh are insured by DICGC (Deposit Insurance and Credit Guarantee Corporation) — same as any other bank.
Post Office FD Rates (2025) — Safest Option
| Scheme | Tenure | Interest Rate | Tax Benefit |
|---|
| Post Office TD (1 yr) | 1 year | 6.90% | No |
| Post Office TD (2 yr) | 2 years | 7.00% | No |
| Post Office TD (3 yr) | 3 years | 7.10% | No |
| Post Office TD (5 yr) | 5 years | 7.50% | Yes — 80C |
| NSC | 5 years | 7.70% | Yes — 80C |
| Senior Citizens Savings Scheme | 5 years | 8.20% | Yes — 80C |
Post office schemes are backed by the Government of India — making them the safest fixed income option available. The 5-year Post Office TD qualifies for Section 80C deduction. Senior Citizens Savings Scheme at 8.20% is the best safe investment for retirees.
FD Comparison — ₹5 Lakh Investment for 3 Years
| Bank | Rate | Maturity Amount | Interest Earned |
|---|
| SBI | 6.75% | ₹6,07,800 | ₹1,07,800 |
| HDFC Bank | 7.00% | ₹6,13,500 | ₹1,13,500 |
| Axis Bank | 7.10% | ₹6,15,900 | ₹1,15,900 |
| IndusInd Bank | 7.25% | ₹6,18,800 | ₹1,18,800 |
| Suryoday SFB | 8.25% | ₹6,36,500 | ₹1,36,500 |
| Post Office TD | 7.10% | ₹6,15,900 | ₹1,15,900 |
On a ₹5 lakh investment for 3 years, the difference between SBI (6.75%) and Suryoday Small Finance Bank (8.25%) is ₹28,700 in additional interest. That is significant — but weigh the safety factor before choosing a small finance bank.
FD for Senior Citizens — Best Options
Senior citizens get an additional 0.25% to 0.75% over regular FD rates. Here are the best options specifically for senior citizens in 2025:
- Senior Citizens Savings Scheme (SCSS) — 8.20%
Best overall for senior citizens. Government-backed, quarterly interest payout, Section 80C benefit. Maximum deposit ₹30 lakh. Available at post offices and major banks. - Pradhan Mantri Vaya Vandana Yojana (PMVVY) — 7.40%
LIC scheme for senior citizens above 60. Monthly pension option available. Maximum investment ₹15 lakh. - IndusInd Bank Senior FD — 8.25% (7.75% + 0.50%)
Among private banks, IndusInd offers the highest senior citizen FD rate. - Suryoday Small Finance Bank Senior FD — 9.10% (8.35% + 0.75%)
Highest rate available for senior citizens — but remember DICGC insurance limit of ₹5 lakh.
Is FD Interest Taxable?
Yes — FD interest is fully taxable as per your income tax slab rate. Key points:
TDS (Tax Deducted at Source):
- Bank deducts TDS at 10% if total FD interest exceeds ₹40,000 in a year (₹50,000 for senior citizens)
- If PAN is not provided, TDS rate is 20%
How to avoid TDS:
- Submit Form 15G (below 60 years) or Form 15H (senior citizens) at the start of each financial year if your total income is below the taxable limit
- This prevents the bank from deducting TDS
Important: Even if TDS is not deducted, you must declare FD interest in your Income Tax Return (ITR) every year.
How to Choose the Right FD
Follow this simple framework:
- Decide your tenure first — Need money in 1 year: choose a 1-year FD. Long-term saving: 3–5 year FD. Do not lock money you might need urgently.
- Match your risk appetite — Zero risk: Post Office or SBI. Low risk: HDFC, ICICI, Axis. Slightly higher risk for higher return: Small Finance Banks (within ₹5 lakh DICGC limit).
- Check senior citizen benefit — If you or a family member is above 60, always open the FD in their name for an extra 0.50–0.75% rate.
- Calculate exact maturity amount — Use our FD Calculator to see exactly how much you will receive at maturity based on the rate and compounding frequency.
Calculate Your FD Returns Now
Use our free FD Calculator to calculate the exact maturity amount and interest for any bank, rate, and tenure.